ONEOK Inc. (NYSE:OKE)

The analysis of the quarterly financial ratios reveals distinct trends across the periods observed.

Net Fixed Asset Turnover

This ratio exhibits a declining trend from the first quarter of 2019 through the fourth quarter of 2020, decreasing from 0.79 to 0.45, indicating reduced efficiency in generating sales from net fixed assets during that period. However, from early 2021, the ratio demonstrates a strong upward momentum, increasing steadily to a peak of 1.15 in the third quarter of 2022 before slightly declining to 0.95 by mid-2023. This recovery suggests an improvement in asset utilization efficiency, albeit with a minor reduction towards the latest period.

Total Asset Turnover

Similar to net fixed asset turnover, total asset turnover shows a descending pattern from early 2019 (0.65) to the end of 2020 (0.37), reflecting decreasing efficiency in utilizing overall assets to generate revenue. From 2021 onward, there is a marked improvement, peaking at 0.93 in the third quarter of 2022. Yet, this is followed by a slight downturn to 0.80 by the second quarter of 2023. This indicates some recent softness in asset utilization, though overall efficiency remains higher than the lower points observed previously.

Equity Turnover

The equity turnover ratio exhibits more volatility but an overall upward trend through the analyzed periods. It starts at 1.90 in the first quarter of 2019, decreases to a low of 1.40 by the middle of 2020, and then increases substantially, reaching 3.61 in the third quarter of 2022. Following this peak, the ratio decreases gradually to 2.66 by mid-2023. This behavior suggests that the company improved its ability to generate sales relative to shareholders’ equity substantially after mid-2020, but some contraction in this efficiency is observed in the most recent quarters.

Overall, the data indicate a period of declining asset and equity utilization efficiency through 2019 and 2020, followed by significant recoveries in 2021 and 2022. The slight decreases in all three turnover ratios in early 2023 imply some challenges or adjustments that warrant further monitoring. Nevertheless, the recent turnover levels remain above those recorded in the earlier years, suggesting an improved utilization of assets and equity compared to the earlier decline period.

Revenues

Revenues exhibited a fluctuating trend across the quarters, with a notable decline during the early stages of 2020, reaching a low point in June 2020. Following that period, there was a substantial recovery, peaking in the fourth quarter of 2021. After this peak, revenues showed a decreasing pattern throughout 2022 and into mid-2023, indicating some challenges in maintaining the prior revenue highs.

Net property, plant and equipment

Net property, plant, and equipment steadily increased over the observed time frame without interruption. The growth was gradual but consistent, suggesting ongoing investment in fixed assets and expansion of the capital base. This upward trend reflects a commitment to maintaining or enhancing operational capacity over multiple years.

Net fixed asset turnover

The net fixed asset turnover ratio initially trended downward from early 2019 through 2020, indicating decreasing efficiency in generating revenues from fixed assets. However, from late 2020 to late 2022, there was a marked improvement in this ratio, reaching its highest levels in late 2022. This improvement signals enhanced asset utilization during that period. After reaching a peak, the ratio declined somewhat in early 2023 but remained above the levels observed in 2019 and early 2020.

Overall Analysis

The data display a recovery dynamic in revenues following a significant downturn in early 2020, likely associated with external market conditions that adversely affected performance. The steady increase in net property, plant, and equipment points to sustained capital investment. Improvements in the net fixed asset turnover ratio after the early 2020 decline suggest efforts to optimize asset efficiency were initially successful, though some recent softness has emerged. Collectively, the trends imply a phase of expansion and operational adjustments, with current challenges indicated by the recent decline in revenues and a moderate reduction in asset turnover.

Revenues

Revenues exhibited noticeable fluctuations across the observed quarters. Initially, there was a decline from the first quarter of 2019 through the second quarter of 2020, with values dropping from 2,780 million USD to a low of 1,661 million USD. A significant recovery commenced thereafter, reaching a peak of 5,420 million USD by the fourth quarter of 2021. Revenues then remained relatively elevated through 2022, but started to decline again in early 2023, falling to 3,732 million USD by the second quarter of 2023. This pattern suggests strong seasonal or market-driven volatility, with a pronounced downturn coinciding with the early 2020 period, likely linked to external economic pressures, followed by a robust rebound and eventual moderation.

Total assets

Total assets showed a generally stable and gradually increasing trend over the timeframe. Starting at 18,934 million USD in the first quarter of 2019, total assets increased steadily until around mid-2022, peaking at approximately 24,527 million USD. Thereafter, total assets plateaued and slightly declined in the first half of 2023, ending the observed period at about 24,038 million USD. The consistent upward trend in assets through most of the period indicates ongoing investment or asset accumulation, with only mild fluctuations towards the end.

Total asset turnover ratio

The total asset turnover ratio, which measures the efficiency of asset utilization in generating revenues, displayed a distinct U-shaped trend. It started relatively high at 0.65 in the first quarter of 2019 and declined steadily through 2020, reaching a low of 0.37 in the fourth quarter of 2020. This decline corresponds with the period of decreased revenues and increasing assets, reflecting reduced efficiency in asset use during this time. Beginning in 2021, the ratio improved sharply, peaking at 0.93 in the third quarter of 2022, indicating much better asset utilization as revenues surged. However, from late 2022 into mid-2023, the turnover ratio trended downward again, settling at 0.80 in the second quarter of 2023, signaling a slight reduction in asset efficiency concurrent with revenue decreases.

Overall insights

The data reveals a significant impact of external conditions around early 2020, with decreased revenue and asset efficiency despite continuous asset growth. The recovery phase saw both revenue and asset turnover increase markedly, reflecting improved operational performance or market conditions. Toward the end of the period, although total assets remained relatively high, both revenues and asset turnover ratios declined, suggesting caution regarding future operational efficiency and market demand. Continuous monitoring of these trends is advised to assess sustainability of performance and asset management.

Over the analyzed periods, revenues exhibit a fluctuating trajectory with distinct phases. Initially, there is a decline from early 2019 through mid-2020, reaching a low point at June 30, 2020. This downturn is followed by a period of recovery and growth, peaking around late 2021. Subsequently, revenues begin to decrease once more through mid-2023. This pattern indicates a cyclical nature of revenue, possibly influenced by external market conditions or operational factors during these times.

Total shareholders’ equity remains relatively stable in the initial periods, with minor decreases and increases fluctuating between approximately 6,200 million and 6,600 million through to early 2021. From early 2021 onward, there is a gradual upward trend in the equity base, culminating in an increase exceeding 7,200 million by mid-2023. This steady growth in equity suggests strengthening financial position or retained earnings accumulation during this latter period.

The equity turnover ratio, which measures how efficiently the equity base generates revenue, generally declines from early 2019 through the end of 2019 but rebounds strongly from 2020 onward. The ratio rises notably starting in late 2020, reaching a peak in late 2022, before tapering off slightly in mid-2023. This indicates improved efficiency in the use of equity to generate revenues during this timeframe, although the recent decline from the peak signals a potential reduction in operational efficiency or changes in revenue relative to equity growth.

Revenues

Exhibit a decline during early 2019 to mid-2020, followed by recovery and peak around late 2021, then a decrease through mid-2023.

Total Shareholders’ Equity

Remains relatively stable with minor fluctuations until early 2021, then shows a sustained upward trend through mid-2023.

Equity Turnover Ratio

Declines in 2019, improves significantly from 2020, peaking in late 2022, slightly decreasing thereafter.